Condo building insurance can be complicated. Specialty condo insurance recognizes the many different risk types and provides clarity regarding which parties are responsible for covering which risks.

Here to Help

The unique nature of condo buildings often leads to some confusion over who is responsible for insuring what. In reality, it’s a simple set-up, but everyone involved needs to know how it works.

How can condo building insurance protect you?

Use the yellow hot spots and explore how condo building insurance can help protect against common risks.

Property Insurance

Risk Factor

Condo and co-op associations may face severe financial consequences from property loss due to fire, wind or other causes.

Solution

Commercial property insurance should provide coverage for damage to the building, personal property owned by the association and income lost due to a covered cause of loss.

General Liability

Risk Factor

Condo and co-op associations are susceptible to many risks, such as claims due to bodily injury, property damage, personal injury and more. The association could also face lawsuits from claims associated with common areas such as hallways, stairwells, swimming pools and parking areas.

Solution

General liability insurance is an absolute necessity for any association. It provides coverage for legal fees and judgments when the association is named in a covered lawsuit.

Crime and Fidelity Bond Insurance

Risk Factor

Crime and fidelity bond insurance is designed to provide coverage to cooperative and condominium associations to protect them from theft of funds or association-owned personal property by an employee, board member and in some cases, the property management firm.

Solution

Crime and fidelity coverage is designed to provide coverage for employee dishonesty, forgery and alteration, computer fraud, counterfeiting and more.

Systems Breakdown Insurance

Risk Factor

With technology performing many tasks in today's world, a breakdown can cause a significant financial burden, including the cost to repair the equipment and any resulting lost income or extra expenses.

Solution

Comprehensive coverage provides protection against equipment mechanical breakdown for machinery such as heating and cooling equipment and elevator motors.

Directors and Officers Liability Insurance

Risk Factor

Directors and officers (such as board members) can be held accountable for decisions they make in the performance of their duties. Any resulting lawsuits are typically expensive to defend and can result in potentially large settlements.

Solution

Directors and officers liability insurance provides coverage for the legal costs to defend a covered lawsuit and may also provide the money necessary for any resulting judgments.

Commercial Umbrella Insurance

Risk Factor

What happens when your condo or co-op building faces a large liability loss that exceeds the basic limit of your standard policy?

Solution

A commercial umbrella policy will provide extra coverage over and above general liability, directors and officers liability, auto liability and employers liability policies. Limits start at $1,000,000 and go as high as $200,000,000.

Cyber Liability Insurance

Risk Factor

Technology has spun a whole new web of liability exposures including the need for protection of privacy, data and financial information for your association residents. Breach of their data can result in costly fees and lawsuits for the association if held liable.

Solution

Cyber liability coverage covers fees and lawsuits resulting from the breach of personal data, assuming that the association is liable.

Environmental Insurance

Risk Factor

Pollutant clean-up is generally excluded from the basic policies. Leaking of a fuel tank can be very costly to remediate.

Solution

Environmental insurance provides coverage for clean-up costs and third party lawsuits as a result of a leak from the tank or related pipes.

Sponsor / Investors Owned Units Insurance

Risk Factor

Typically the policies for the association exclude coverage for the sponsor or holder of unsold shares for the interior of the units they own.

Solution

A policy should be maintained to provide coverage for what you are responsible for within the unit, as well as any lost income and lawsuits resulting from acts within the unit.

The condo owners association insures some parts of the building against damage with an “association master policy.” The individual condo owners will be responsible for any remaining insurance for their own unit.

The association master policy will almost always cover common areas such as hallways and the elevators, but other coverage varies.

The simplest option is “bare walls coverage,” meaning the condo owners association policy simply covers the walls, floors and ceilings in each unit, with the individual owners responsible for everything else, including fittings and fixtures.

“Single entity coverage” extends the condo owners association coverage to “standard finishes,” such as fitted kitchens and bathroom units, but not the owner’s personal property. One note of caution—if an owner replaces any fitting, such as a kitchen counter or carpet, it will no longer be covered by the association master policy.

Finally “modified single entity” (also called all-in coverage) extends coverage to any replacement or upgraded fittings.

If you need to know more about condo building insurance, contact us today.

Let’s discuss your condo building insurance.

One of our insurance advisors will reach out to you to review your information and present you with the appropriate condo building insurance solution. There’s no obligation, just good-old-fashioned advice.